Court Temporarily Prevents Activision Blizzard's Vivendi Buyout

Activision Blizzard was hoping to buy out Vivendi and gain its autonomy – a move that would have prevented the French media company from bleeding the game developer/publisher's reserves. However, a recent court order throws the transaction into jeopardy.

The stock buyback didn't make everyone happy; two shareholders filed suits against against Activision, the first claiming the deal was only to "aggrandize defendants Kotick and [Activision co-chairman Brian] Kelly and provide billions of dollars' worth of Activision stock to the insider investor group at a discounted price." The second suit seeks an injunction, and also claims that Activision board members stand to improperly benefit from the deal.

According to an Activision press release, the Delaware Chancery Court issued an injunction that prevents the deal from closing, "halting the closing of the transaction unless the injunction is modified on appeal or the transaction is approved by a stockholder vote of the non-Vivendi stockholders." Without the ability to finalize the deal, the game company can't stop Vivendi from paying down its debt using Activision Blizzard funds.

Activision claims that it is "committed to the transaction and is exploring the steps it will take to complete the transaction as expeditiously as possible." We reached out to Activision to get clarification on timing and process. We'll update should we hear back.

Our Take (by Mike Futter)This is bad news for Activision. If Activision can't get the courts to modify the injunction or get the non-Vivendi shareholders to vote in favor of the deal, the company is back where it started. It won't be able to free itself from Vivendi, at least not how it intended, and could be facing a cash drain of $3 billion through the previously threatened "special dividend." This would drain Activision's cash reserves, force the company to bring money back in from overseas (and assume the related tax liability), and at the end have nothing to show for it.

Given that this is still a single-party civil case, it could still be settled, paving the way for the transaction to go through as originally planned. That could open the door for other shareholders to file similar claims. I have to believe that Bobby Kotick is currently working to secure votes from as many eligible shareholders as he possibly can.

The two shareholders filing these suits just want money and to settle out of court, and unfortunately they will get it just so this buyout can happen.
It is just a matter of what they settle on.
They know they can get it, and they are just being greedy....F'ing Rich People.
But the fact that it makes ol' Bobby cringe makes me smile.

I personally do not like Activision as a game company, but they have found a gold mine in video games with solid business. Their practices of making lazy sequels and charging a huge premium for shallow DLC is something I do not buy into, but I don't have to buy, so I don't feel any hate towards them as a company.

It is unfortunate for any company trying to break off on their own to be prevented from doing so, especially in this instance where if they don't, they'll lose billions.

You can love or hate Activison, but it would be a loss to the industry if they were to disappear, so I hope that this will go in a positive direction for them.

This is stupid if they have the money to break away why not, this is a free country, right? And no I mean no political disrespect, just to clear the air. And if people think killing Activision is a good thing, think again. Call of Duty might be overrated, and annualized every year, but it's because of Call of Duty gaming has received so much attention from the media, and yes GTA is also a huge factor too. But if Activision ever fell, I honestly believe this wouldn't be a good thing for gaming overall.

Everyone wants that cash stock pile ATVI has been storing up lately. If they were given free reign with their cash what would ATVI do with it? Everyone likes a cash cushion but the billions ATVI has been shoring up seemed greedy rather than smart. Where are the aquisitions or new IPs? If you're a growth co then use your money to grow, if you're a whale then pay out a dividend to loyal shareholders. Buying out Vivendi seemed like a good play as those guys just seemed like tycoons sitting on a ranch somewhere shooting clay pigeons. Do something with your cash and do it quick!

What's with all of the hating on rich people? Yes some of them are only obsessed with making more of it, but I have yet to see a single person strive to be poor. Grow up children. This will be bad, very bad if Activision is drained of their reserve funds. Less money to invest in new IPs and technology equals less for us as gamers.

I can help but feel a little warm and cozy inside. I was utterly disgusted by how money hungry Activision had become. I don't wish the companies demise but Kotic's fat money sucking ass can use some humility. This what you get for ruining Diablo... muwhahahahahaha

This brings a warm and fuzzy feeling to my heart. I don't have any sympathy for Activision. If Vivendi does in fact suck them dry, I wouldn't shed a tear. I can only hope the same fate will somehow befall Electronic Arts someday soon as well. Imo, Gaming would most certainly be better off with out their shady practices and lazy developing. These companies have done nothing but regurgitate content and extract money. If Activision does somehow survive this,; hopefully they will change their ways for the better. Doubt it, but one can hope.
Obviously this is just a ploy by the shareholders to extract more money from Activision. Sucks when you get held hostage by a rich company doesn't it Activision???? Kharma sucks don't it :)

While I agree it is horrible news for the company of Activision, I can't help be read the comments above me and wonder if Kotick had actually opened investment for the stock held by Vivendi to current Activision shareholders, if this would be a moot point.

I mean I see several comments trashing the 'rich' people decisions to make money, but at the same time the articles put forth here on GI gave the impression that Kotick and his friends through insider information put together a deal with Vivendi for the stock at a lower price than publically available excluding the majority of Activision stockholders. I could be wrong and I hope someone who has been following this story more can clarify this for me.